R&D ADMINISTRATION IN THE HIGH TECHNOLOGY INDUSTRY: HOW TO MANAGE A PARADOX

Nobuiuki Costa Ito, Mihail de Pieri Mirica

Abstract

The competitive environment of the knowledge age is getting more complex, dynamic, and fast-moving each day. The high tech industry is intensively tied to its effects and demands for innovation, so the field of Research and Development must act strategically, generating innovations and granting success and sustainability to the business. However, there is a paradox in R&D which may lay traps and obstacles disguised by the busy day-to-day activity of the organization. The purpose of this paper is to point out directions that managers may take to cope with these contradictions in R&D administration. The R&D paradox is rooted in the conflict between exploitation, achieved by continual improvement through incremental innovation, and by exploration, which seeks new opportunities in the creation of new technologies through disruptive innovations. These two sides of the paradox demand different, and sometimes even divergent, organizations. Top management leadership is crucial for the acceptance and balancing of the contradictions created by this paradox, and can align exploitation/exploration through distributive and integrative decisions and transform companies into truly ambidextrous organizations.